In the last few weeks, President Trump has signed several executive orders that may have an impact on myeloma patients if the orders survive legal scrutiny.
For some context in understating these orders, it is important to know that executive orders are mandates or directives for executive branch departments to follow related to an existing law. The orders or memorandums are not laws per se but carry the force and effect of law.
Once an executive order is signed, the agencies identified in the order begin to work on how that order can be fulfilled. In most cases this requires new rules to be created within that agency. The federal rule-making process is a structured, formal event with an opportunity for stakeholder comment after an initial draft rule is proposed.
It is important to note that the timeline for a rule to become final is quite lengthy and it is unlikely that there will be any immediate impact from the recently signed orders.
Executive orders are often used by presidents when facing Congressional gridlock to address issues they believe to be important in an expedited manner. The usage of executive orders does not come without opposition and controversy. The opposing political party and small government advocates tend to criticize their usage as an overreach of presidential power.
Since July 24th there have been six executive orders announced that may impact myeloma patients.
- July 24 - Increasing Drug Importation to Lower Prices for American Patients
- July 24 - Lowering Prices for Patients by Eliminating Kickbacks to Middlemen
- July 24 - Most Favored Nation Drug Pricing (not yet published)
- August 3 - Improving Rural Health and Telehealth Access
- August 6 - Ensuring Essential Medicines, Medical Countermeasures, and Critical Inputs Are Made in the United States
- August 8 - Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster
Increasing Drug Importation to Lower Prices for American Patients
This order allows for individual state plans to import certain drugs, authorizes the re-importation of insulin products made in the United States, and creates a pathway for widespread use of personal importation waivers at authorized pharmacies throughout the United States.
While oncology drugs have not been mentioned, this order could provide a pathway for the importation of oncolytic treatments in the future.
In previous discussions of similar policy proposals, Canada has been the country from which importation would arrive. Several states, including Florida, Vermont, Colorado, Maine, and New Mexico have signed into law legislation to establish importation programs for prescription drugs from Canada.
In order for any importation plan to go into effect, the Department of Health and Human Services (HHS) Secretary must certify that it meets the safety and cost saving requirements in current law, which this order directs the HHS Secretary to do. Critics believe it will be extremely difficult to meet these metrics.
Those in favor of the proposal believe it could help reduce patient out-of-pocket expenses. This proposal has been met with concern by the Government of Canada, which stated that it would be unable to meet the needs of the U.S. market without impacting access to medications for Canadians. There are also U.S. stakeholders opposed to this proposal who have expressed concerns, the most major being fears about the safety of U.S. patients.
Lowering Prices for Patients by Eliminating Kickbacks to Middlemen
This order relates to a previous rule on rebate elimination for pharmacy benefit managers (PBMS). The previous rule was proposed by the Office of Inspector General (OIG) of HHS in early 2019, which was withdrawn in July 2019 after submission of public comments.
This order states that it is, “the policy of the United States that discounts offered on prescription drugs should be passed on to patients,” the executive order directs the Secretary of HHS to “complete the rulemaking process he commenced” seeking to:
- Exclude from safe harbor protection under the federal anti-kickback statute, “certain retrospective reductions in price [i.e., rebates] that are not applied at the point of sale or other remuneration that drug manufacturers provide to health plan sponsors, pharmacies, or [PBMs] in operating the Medicare Part D program”; and
- Establish new safe harbors that would permit health plan sponsors, pharmacies and PBMs to apply discounts at the patient’s point-of-sale in order to lower the patient’s out-of-pocket costs, and that would permit certain bona fide PBM service fees.”
This order varies from the previous proposed rule in that it only applies to Medicare Part D, whereas the prior proposed rule had a slightly broader application.
A major criticism of the previous proposed rule was that it could not be implemented without increasing premiums for Medicare beneficiaries and federal spending under Part D.
The executive order attempts to address this issue by stating that, “[p]rior to taking such action, the [HHS] Secretary . . . shall confirm – and make public such confirmation – that the action is not projected to increase Federal spending, Medicare beneficiary premiums, or patients’ total out-of-pocket costs.”
It is unclear how this order will significantly differ from analysis of the prior proposed rule. The Office of the Actuary of the Centers for Medicare and Medicaid Services (CMS) estimated that under the previous proposed rule, federal spending under Part D would increase by $196 billion and beneficiary premiums would increase by $58 billion over a 10-year period.
Most Favored Nation Drug Pricing (Not Yet Published)
This order relates to prices paid by Medicare for treatments in Part B. The text of this order is not yet officially available, and the order was initially held until August 24th to give the pharmaceutical industry a chance to offer alternative proposals, however it remains unavailable at this time. The initial idea from the President was thought to be a version of the International Pricing Index first proposed October 2018.
As background, the International Pricing Index would tie U.S. prices to those in other developed nations. Those in favor of this concept believe the U.S. is unfairly paying higher prices. Critics of the initial plan believe it could impact access to various therapies and hinder future innovation. We share these concerns and are keeping a close eye on this proposal.
There has been some reporting that drug industry lobbyists have provided two alternate proposals, however it remains seen to be what the final product will be or if this will continue to advance. We will continue to provide updates on this as it progresses.
Improving Rural Health and Telehealth Access
This order seeks to improve the life of rural Americans by creating solutions to access issues, as well as continue the use of telehealth as a permanent tool for doctors and patients.
The order directs HHS to submit a report detailing their future policy initiatives with the goal to “prevent disease and mortality by developing rural-specific efforts to drive improved health outcomes”
The Coalition to Improve Access to Cancer Care (CIACC), which is led by the IMF, is working to promote oral parity as a potential solution for rural access. Enabling patients to be switched to oral or self-injectable anticancer treatments, when medically appropriate, would allow rural patients to take treatment from home and save valuable time traveling to far-off cancer centers.
Ensuring Essential Medicines, Medical Countermeasures, and Critical Inputs Are Made in the United States
This order seeks to:
- accelerate the development of cost-effective and efficient domestic production of Essential Medicines and Medical Countermeasures and have adequate redundancy built into the domestic supply chain for Essential Medicines, Medical Countermeasures, and Critical Inputs;
- ensure long-term demand for Essential Medicines, Medical Countermeasures, and Critical Inputs that are produced in the United States;
- create, maintain, and maximize domestic production capabilities for Critical Inputs, Finished Drug Products, and Finished Devices that are essential to protect public safety and human health and to provide for the national defense; and
- combat the trafficking of counterfeit Essential Medicines, Medical Countermeasures, and Critical Inputs over e-commerce platforms and from third-party online sellers involved in the government procurement process.
The Executive Order does not specifically define the term “Essential Medicines,” and instead delegates the task of identifying those products that are “medically necessary to have available at all times in an amount adequate to serve patient needs and in the appropriate dosage forms” to the FDA Commissioner, in consultation with the Director of OMB, the Assistant Secretary for Preparedness and Response in the Department of Health and Human Services (HHS), the Assistant to the President for Economic Policy, and the Director of the Office of Trade and Manufacturing Policy.
Timing for this order remains to be seen. The current supply chain for all medical products, which (ingredients to make medicines, vials to hold them. IVs and syringes, etc.) is preparing for the strain of a potential COVID-19 vaccine. Many fear requiring a shift in manufacturing could exasperate an already complicated process. Further obscuring this order is the uncertainty in how much of the US medical supply chain is foreign sourced, with some estimates placing that number at 90% foreign.
Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster
This order instructs the U.S. Treasury Department to suspend collection of the 6.2% payroll tax related to social security funding from September 1st through December 31st. This suspension only impacts workers who make under $104,000 per year.
For workers who choose to accept this deferment, paychecks will appear larger through the end of the year. However, this increase amounts to a loan, as the full deferment amount must be repaid. President Trump has indicated that he would work to “forgive” the deferment he be re-elected in November.
However, some critics from both political parties have come out against this idea, as they believe payroll deferment does not help unemployed workers during the pandemic and the money deferred is the primary funding mechanism for social security and disability insurance
Those in favor believe it would provide an economic boost to workers. Treasury Secretary Mnuchin has stated that if the payroll deferment is forgiven, the administration would process “an automatic contribution from the general fund to those trusts funds,” to cover the lost revenue to social security.